Small Business Tips


Business Coaching Experts

Alternative finance options for small business owners in the UK

When you run a small business, such as an SEO consultancy, it can be tough getting finance for both your business plans and personal plans. It might be that you want to buy new equipment that will make you more efficient, gain a larger space to fulfil your orders or need funds to take advantage of all sorts of business opportunities.

On a personal level you may be looking to move house and it can prove difficult to secure a mortgage as a freelance contractor or sole-trader. Even when you need the money for sound reasons and have the income to cover repayments, it’s not always possible using traditional lenders.

But thanks to loan brokers (see ) it’s possible to find a lender that will help you to potentially raise hundreds of thousands to invest in your business on favourable terms and without a fuss.

There are two main options for you to choose from and this is our advice for SMEs:

Secured loans

A secured loan, sometimes known as a second mortgage, is a loan that sits behind your current mortgage on a property. The money that your business needs is raised by using your equity in the property as security for the loan. Equity is the amount of the property you actually own.


As long as you own a property and have equity in it, you may be able to take out a secured loan, depending on your circumstances. A secured loan is usually best for if you want to spread the repayments over a long period.

Secured mortgages are sometimes known as ‘second charge’ mortgages, because they’re second in line to your initial mortgage. So, for example, if you decided to sell the property, your first mortgage takes priority and so would be paid off first, with whatever’s left being used to pay off the secured loan (or ‘second charge’ mortgage).

Bridging loans


You’ve probably heard of bridging loans and know that they’re typically used as a short-term loan that’s lent to cover the gap between two transactions, typically when someone is buying one house and selling of another. But did you know that a bridging loan can be used by a business to raise capital in a short timeframe?

Bridging loans are a short-term lending option, usually to ‘bridge the finance gap’ for a year or less.

Because a bridging loan can be put in place relatively quickly, they’re an ideal option for when you need to move quickly to capitalise on a business opportunity, to develop property, pay tax liabilities or to meet other business obligations.

Like the secured mortgage described above, bridging loans are secured against property and land. Most lenders can loan somewhere between 65% and 80% of the value of the property that you put up as security (sometimes known as loan to value, or LTV), but some may go up to as much as 95% or even 100%, but that will depend on your circumstances.

The amount you could borrow depends on the lender, the value of the property or land being used to secure the loan, the amount of equity you have in the property and your circumstances.

Usually, the minimum amount that can be borrowed using a bridging loan will be £10,000 but can go up to as much as £100 million.

So if you’re a small business owner and you need to raise money for your business, don’t miss out on an excellent opportunity or risk not meeting your business obligations. Contact a bank or a broker and find out your alternative finance options.

3 thoughts on “Alternative finance options for small business owners in the UK

  1. Hey!

    (I’m not sure my message went through the write for us page. Apologies if it did)

    I’m the marketing manager for Aldora Capital, and I came across your site looking for places to publish some of our writing. You guys have written quite a bit about small business financing. I liked your article about alternative options in the UK. You mentioned bridge loans, something most people don’t think about. 

    If your readers found that valuable, they’d probably be interested in the kinds of things we write about as well. I had a few ideas for articles, let me know which one you like and I can get it written! 

    1. Which SBA loan is best for your small business?
    2. 3 misconceptions about SBA loans.
    3. 5 questions to ask when deciding on an SBA loan.

    Let me know which one is best and I’ll get it written. I’m excited to see where this goes! 


Leave a Reply

Your email address will not be published. Required fields are marked *